What GIC's shrinking returns mean for Singapore

The wealth fund has delivered its worst annual performance since 2001.

Reuters reported that GIC’s shrinking returns are adding gloom to Singapore. The sovereign wealth fund, which manages an estimated $343 billion of assets, has delivered its worst annual performance since 2001 barring the financial crisis. The outlook is depressing too. The challenges of investing overseas compound the mood at home as the city's first family feud in an ugly public squabble.

Stripping out inflation, the wealth fund reported a 20-year annualised real return of 3.7 percent, compared to a rolling return of 4 percent last year. Including inflation does not improve the picture. Average nominal returns also underperformed GIC's own reference portfolio, which comprises 65 percent global equities and 35 percent global bonds. The fund uses the reference portfolio to measure its risk tolerance, rather than as a performance benchmark.

Read the rest of the story from Reuters here.

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